The iPref is just preferred stock, a security that delivers a perpetual dividend. He gave them a silly name to be more Apple-y. Einhorn believes they are a more creative way to return money to shareholders. He also believes they could unlock billions in value for Apple.

Whether or not iPrefs are a good idea is open for debate. And it seems like Einhorn has had the debate with Apple's management.

In fact, Cook says proposal two is actually better for shareholders because it takes away power from Apple's management. If Apple wants to do anything radical, like iPrefs, then it needs approval from shareholders. Right now, under Apple's current governance, it could just issued iPrefs without shareholder approval.

In Einhorn's call, he didn't deny this was true. Instead, he tried to change the conversation around proposal 2.

Einhorn has made proposal 2 into a giant referendum on Apple's cash management. He wants all shareholders who would like to see Apple do something other than pile up cash to vote against proposal 2. (Yes, Apple has approved some dividends and buybacks, but not enough for Einhorn.)

Now, what's interesting about this is that it's feels like a sneaky move. Because, if what Cook says is right — prop 2 would give shareholders rights — then voting against prop 2 is a way for shareholders to feel like their voicing their opinion while at the same time taking away their rights in the long term.

Einhorn said on the call that people could vote next year for better governance. He thinks Apple is being sneaky bundling a lot of stuff into this one vote.

Regardless of who is right, Einhorn has set up a big showdown with Apple's management. If shareholders want to see Apple get more creative with its cash, they can vote on it February 27 at the shareholder's meeting.